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Editor’s note: This article is Part II in the three-part series about Business Success. Part I, which addressed aspects of a successful company, appeared in the April 2010 issue, and Part III, which explains various strategies for success, will appear in the June 2010 issue.

In Part I of the Business Success series that appeared in the April 2010 issue of Skin Inc. magazine, the details that go into making a successful company were examined, including the importance of thorough and pinpointed logistics, unwavering perseverance and a positive owner outlook. With just the right combination, these aspects can result in a vibrant and profitable company. But once a business breaks through the first several years and starts seeing its numbers in the black, what are the next challenges on the horizon that will need to be faced to ensure that the company not only stays in the black, but also becomes a community—or even an industry—leader?

Keep your focus

Most business owners will agree that initially achieving success is the most challenging time for a business. “When you start, that is the hardest,” recalls Tazeem Jamal, owner of the 20-year-old spa Skindulgence, The Urban Retreat, located in Port Moody, British Columbia, Canada. “That was a hard time. When you’re new, you’re so excited about what you’re doing; you want to make a success out of it.”

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Howard Murad, MD, founder of the 21-year-old professional skin care line Murad, as well as El Segundo, California-based Murad Medical Spa, Murad Inclusive Health Center and Murad Medical Group, agrees. “Starting from zero is the most difficult time,” he says. “You know a lot less than you know when you get older; your experience is limited, and you have fewer contacts. Starting a business requires getting the ball rolling, and soon an avalanche starts.”

After month in and month out of burning the midnight oil and stretching every limit possible, beginning success can evolve into an established business, and an owner’s challenges will change. “As businesses evolve, they require different demands,” states Jan Marini, founder of 16-year-old Jan Marini Skin Research, Inc., located in San Jose, California. “Your role changes, but you have other demands on your time, and you may not be as directly involved in the day-to-day minutia, but you have a great deal of responsibility in keeping the organization focused, making sure there is a clear vision that people can intellectualize, and that there is sustainable growth and stability.”

Kim Dudek, founder and owner of the 21-year-old Belladonna Day Spa in New Orleans, agrees that a leader’s role is an important one for maintaining a successful business. “When you are the head of something, everything you do is noticed. If I don’t smile when I come in, if I don’t say ‘hello,’ if my makeup isn’t right, I set the tone and people notice. You have to do some introspection when you have 50 employees and three businesses and ask yourself, ‘What am I doing to contribute to their success?’ and ‘What can I change about what I’m doing?’ ” she explains. It is this constant evaluation that has to carry through to other areas of the business as well, in order to maintain focus and stay on top. A constant and ever-present emphasis on clients, plus a team that can feel passionate about your business, are crucial aspects of continued success.

Clients. “The single most important thing is to focus on the client experience,” says John Gray, owner of 150-year-old Glen Ivy Hot Springs in Corona, California. “It is the little unexpected pluses clients experience that sets one spa above another.” Jamal agrees, pointing to her client base that spans generations. “I built my business on repeats and referrals. Skindulgence is a small boutique spa, and I wanted that concept to remain; I never wanted to expand. I just wanted to grow and maintain that one-on-one contact. Now, I’m seeing the children of some of my original clients,” she says. “It’s important to nurture the client base you have and ask them to refer people they think would enjoy the quality of care that you offer.”

Team members. “The two c’s are what we are looking for in team members; they have to have confidence and provide great care. You need a team leader who is focused on client experience and a staff with the professional competence to deliver an accomplished facial and have a genuine caring quality,” says Gray. “It emphasizes the need to hire well and astutely. It’s hard to train people to care, so you have to hire people who have that naturally.”

Amber Yeargin, director of education for 20-year-old PCA Skin, located in Scottsdale, Arizona, agrees. “It is important to invest in your people; that sets a strong foundation internally. We hold a lot of different education events throughout the year for every member of the company, including a yearly educator summit, and biannual customer service and sales workshops. It’s very important to make sure your house is in order, and then you’ll be able to execute externally.”

According to Murad, “You’re only as strong as the people who work with you, and you have to give those people an opportunity to use their brains and the latitude to do their business.” Dudek also cautions against the consequences of hiring the wrong people, an experience she had firsthand after Hurricane Katrina hit New Orleans in 2005. “We did everything we could to help the city come back and give people jobs, but that was at the expense of Belladonna. I was hiring people I shouldn’t have, and they just didn’t care about the spa. In the past, I always had team members who were dedicated to Belladonna,” she says. Only recently has her team become one the spa deserves again. “It feels so good in here. The energy is great. It’s very exciting to have the team members who are still with me say they are feeling the good energy again.”

Overcoming obstacles

Even the most focused long-term businesses encounter obstacles now and then, whether they be catastrophic ones, such as Hurricane Katrina, or economic ones, such as the current recession. “For whatever reason, companies go through cycles. There are some nice cycles where business is booming, and then there are periods that aren’t so good,” explains Murad. Marini agrees, saying, “I think that No. 1 is having confidence in your own ability to resolve challenges or conflicts fairly and appropriately and not expect that the solution is always going to be immediately apparent. Businesses are built one day at a time; it is a marathon, it’s a process.”

Jamal admits that she is one of the many spa owners who have been challenged by the current recession. “The past 18–24 months have been the toughest I’ve experienced throughout the history of my business,” she says. “It’s about reinventing yourself and staying positive. I’ve surrounded myself with positive people and have gotten involved in the industry. I’m a big believer in giving back to the community. To be successful, you have to align yourself with successful people so that you can continue to motivate each other.”

Gray says Glen Ivy has also been challenged by the economy, but due to method changes in various departments and attitude changes in clients, the spa was up approximately 17% over 2008. “We’ve done promotions to make things more affordable, and guests are forgoing expensive vacations to have enjoyable experiences more frequently, such as visiting the spa for two or three days at a time,” he says.

Staying customer-centric is a challenge PCA has faced head on. “It can be difficult to stay focused on your customers’ needs, so we made it a point to go out into the field and spend more time with ours one-on-one,” says Yeargin. “You can work in a room with four walls and think something is great and make a big mistake that you only realize after the fact. We don’t work on anything now until we have feedback from customers.”

Even uncontrolled weather conditions and catastrophic events can challenge a business to its breaking point, whether it be an earthquake, unrelenting snowstorms or, in Dudek’s case, a hurricane. “During Katrina, I was in a personal funk. It’s odd to go through a period where your business’s culture changes, and I let it change because I was so exhausted. I had to recreate myself after 20 years in business,” she states. “It took me asking a mentor for help and letting go of the trauma. A lot of people are emotionally damaged from Katrina and those of us who are ready to move on can’t support that type of energy.” In order to move on, Dudek is embracing change, something that has always been one of the secrets of her success. “Do not be afraid of change. If what you’re doing isn’t working, you can’t continue to do it; that’s the definition of insanity. You have to figure out how to change it,” Dudek suggests.

Stay hungry

One of the biggest challenges for companies that have found success and want to maintain it can be keeping the passion for the business alive. “We’re still hungry to do better,” says Murad. “Once you stop trying to become better, the only place to go is down. Occasionally, companies begin to think that they’ve made it, so they don’t have to be as nice to everybody or have the nicest offerings. You have to be as hungry in the 21st year as you were in the first.”

Yeargin agrees, saying, “A business owner has to be an intellectually curious person who wants to learn new things. Be flexible in what you do and how you interact with people. Be open to new ideas and don’t be set in your ways.” Jamal also believes that being stagnant and bored are recipes for disaster when it comes to staying on top. “The fire always has to be burning, and you can never let that fade out. Go ahead and let your guard down and acknowledge when you’re feeling badly, but you can’t stay there,” she states.

This attitude becomes second nature to those who have been in the game long enough, as is evidenced by Gray’s philosophy. “You have to stay true to your vision and change with the times. Adapt and adjust, change pricing, upgrade retail items, add more training, add a treatment ... the part that doesn’t change is staying true to your original vision,” he says.

Poised for longevity

The spa industry, as with most industries in the United States, is in a state of evolution due to many factors, including the economy, and the changing needs and wants of clients. What does the future hold for this industry? Who better to make a prediction than those business owners who have navigated the sea of industry challenges thus far.

“We are going to see this market evolve,” predicts Marini. “It’s going to be more difficult to have a presence in this marketplace unless you have organizational depth, and the ability to support your customer base in a sophisticated manner.” Yeargin also points to the changing industry, believing that change is going to eventually result in quality rising to the top. “One of the challenges that we are experiencing is conflicting information, which could lead to more confusion for professionals and consumers,” she says. “They will look for accurate information, and if they can find sources that are honest, those companies will rise above the rest in the end.”

Competition is another powerful force both today and in the future, according to Murad. “Today, there is more competition, and it comes from everywhere. You have to understand that and be willing to modify whatever you do,” he says. One of those modifications might be to become more connected with other health care professionals, because, according to Jamal, she sees a future where health care, spa and medical professionals will become closer. “Align yourself with all kinds of professionals. If you’re not working with physicians, at least have a personal referral relationship to help stay in that realm,” she recommends.

All in all, says Gray, clients are driving the changes taking place in the spa industry. “The industry in the United States has seen a great deal of growth during the past 15 years, and we have an increasingly savvy spa-going public with higher expectations. In order to succeed in the future, it’s the spas that have both competent and caring employees, and originality and innovation in the client experience they offer that will succeed.”